Vermont needs to build a culture of transparency

Dec. 20, 2011

Written by

Shap Smith

The rural nature of our state, its proud tradition of buying local, town meetings and strong community control foster a sense of togetherness and trust. We depend on this trust when we go to the corner store for milk or deposit our money in the bank. We expect our milk to be fresh and our money to be available when we need it. When one of those businesses falls short, the community's trust is eroded and the institution loses credibility.

As the trustees of public dollars, our government institutions have an even greater responsibility to safeguard the public's money. A number of embezzlement cases this year have demonstrated that public institutions, like private business, can and must improve their financial oversight.

A common theme in the recent cases of embezzlement in our state is of the failure to put into place systems that provide the appropriate level of accountability and oversight. We have seen instances where a trusted employee or volunteer single-handedly undermined an otherwise strong and valuable entity by stealing the money he or she was entrusted to protect. Embezzlers often had unchecked control over the money taken. The internal controls were flawed or, even worse, nonexistent.

While it is impossible to prevent all instances of embezzlement or similar crimes, it is possible to put in place a culture of transparency that will help deter future offenses. Money managers must feel accountable for their actions, co-workers should be aware of the warning signs, and processes should be in place to prevent and detect questionable fiduciary practices.

As speaker, I take government effectiveness very seriously. The public entrusts its elected officials and civil servants to watch over its money as if it were their own. During my tenure, the Legislature has taken steps to ensure that taxpayers are getting the best bang for their buck. We have passed legislation to open government, making it more transparent, and have begun investigating how to prevent embezzlement in our communities.

Our commitment to transparency is not new. For instance, when Vermont received ARRA (federal stimulus) funds in 2009, we worked with the administration to ensure that the monies received by the state of Vermont were spent effectively and that people would be able to understand where their money was invested.

This year the House Committee on Government Operations will continue its work on the dual issues of transparency and accountability. Together with the Senate, the administration, the attorney general, the state auditor, the Vermont League of Cities and Towns, and other key stakeholders, the House will ensure that towns, small businesses, and nonprofits have the tools they need to prevent and detect embezzlement.

As we rebuild our state after Tropical Storm Irene, this work takes on an increased degree of importance. Millions of local, state and federal dollars will be expended to repair and replace the roads, bridges, and buildings damaged or wiped away by Irene. We must be vigilant as this money is dispersed to ensure that these funds are allocated in an effective and transparent manner.

Embezzlement is a crime that can be minimized or prevented if institutions adopt a culture of awareness and proper fiduciary safeguards. Our commitment to state agencies, local governments, nonprofits and small businesses across Vermont will be to promote practices that will help prevent embezzlement in the future.